Updated Income Tax Bill tabled at Lok Sabha: No Changes to "Accountant" Definition [Read Bill]

Finance Minister Nirmala Sitharaman today introduced the Income-tax (No. 2) Bill, 2025 in the Lok Sabha, replacing the earlier February draft that the government withdrew last week. The revised draft carries forward most provisions while incorporating Select Committee inputs; however, it leaves untouched the law’s treatment of who counts as an “accountant” for appearances before the incometax authorities.

The fresh bill confirms that definitions appear in Clause 2 and, for “accountant,” expressly cross-refers to Section 515(3)(b) rather than rewriting the term in the definitions clause itself. In Clause 2(1), the bill states that “‘accountant’ shall have the meaning assigned to it in section 515(3)(b).”

Section 515(3)(b) sets out the operative meaning. In substance, an “accountant” is a chartered accountant (as defined in the Chartered Accountants Act, 1949) holding a valid certificate of practice. The section also lists exclusions to prevent conflicts: for companies, anyone ineligible to be appointed auditor under Companies Act, 2013 section 141(3); in other cases, the assessee himself or certain related persons (including partners or members), employees, individuals with specified financial ties to the assessee beyond small thresholds, those in a prescribed “business relationship,” and persons convicted of fraud within ten years.

A comparison with the operative law under the Income-tax Act, 1961 shows the same structure and substance. Explanation to Section 288 defines “accountant” as a Chartered Accountant with a certificate of practice and contains a parallel set of exclusions (including the Companies Act, 2013 section 141(3) ineligibility, related-party and employment bars, de-minimis financial thresholds, business relationship bar, and a ten-year post-conviction bar). In other words, the new bill does not alter who can act as an “accountant” for representation.

Today’s tabling follows the government’s decision, communicated last week, to withdraw the February version and bring a corrected draft that tightens drafting, cross-references and alignment without shifting core policy. The Statement of Objects and Reasons accompanying the No. 2 Bill records the withdrawal of the earlier bill and notes that “almost all” Select Committee recommendations were accepted before the revised text was readied. The document is dated August 10, 2025, under the Finance Minister’s signature, with the President’s recommendation letter dated August 8, 2025.

With the definition of “accountant” unchanged, tax representation norms will continue to hinge on chartered accountants with active practice certificates, subject to the longstanding exclusions. Any future adjustments, if contemplated, would need explicit amendments to Section 515(3)(b) during the legislative process; none have been proposed in the text introduced today.

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